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Euro Jobs Data Worsens, Dampens Summit Optimism

  • Dominic Laurie

A woman carries shopping bags as she passes homeless people outside Monastiraki metro station in Athens, Greece, January 24, 2012.

A woman carries shopping bags as she passes homeless people outside Monastiraki metro station in Athens, Greece, January 24, 2012.

Unemployment in the eurozone has reached its highest level since the introduction of the European single currency 14 years ago. Twenty percent of Greeks and 23 percent of Spaniards are out of work.

A day after the summit of European heads of state ended with smiles and handshakes, Tuesday's jobs news was a reminder that Europe's economy will get worse before it gets better.

Figures from the EU statistics agency show the number of people out of work in the 17 countries that use the euro rose to a level not seen since the system was introduced in 1999. Sixteen-and-one-half-million people - 10.4 percent of the population - are now out of work.

Jobs and economic growth were at the top of the official agenda Monday at the Brussels summit. The final agreement provided for billions of euros from unused EU funds to go to projects to help unemployed young people.

But Economics Professor Paolo Guerrieri, of the College of Europe in Bruges, Belgium, said the rate will rise even higher this year because of wrong policies chosen by eurozone governments.

"Almost all countries in Europe are following austerity recession policies, so things are going to become worse and worse... We are still in a recession, in minus something for this year, and if you cut demand, if you cut expenditure public and private, the final story is unavoidable," said Guerrieri.

Under the austerity policies, many European countries are cutting spending and raising taxes. And it is Europe's young people who are suffering more than their older, more experienced colleagues. Almost one in two Spaniards and Greeks between the ages of 16 and 24 cannot find work. Many have been without a job for a year or more.

Professor Guerriero is not alone when he says violent protests will become more common if the job market does not improve soon.

"The social situation is still under control. In other words, the protests are still limited to some specific groups. But if the recession is going to become worse and worse, by the second part of the year, I am afraid the social kind of tension is going to increase and become quite difficult to control," said Guerriero.

Job creation needs economic growth, but the countries in the eurozone with the highest unemployment also have big debts to pay off, which will be difficult because their economies are still stagnating or even shrinking. They are not generating enough revenues to shrink their borrowings - let alone provide more money to assist job creation schemes on the scale needed.



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